Tim Hortons layoffs: Long-time employees escorted out the door

CBC

Dozens of corporate Tim Hortons workers, including pregnant women and staff who had been with the chain for 30 years, were summoned to meet with outplacement agents and then escorted out the doors of its regional offices and headquarters yesterday as part of a nationwide restructuring.

An employee who asked to remain anonymous described the scene and estimated about 40 per cent of Tim Hortons corporate workforce had been let go.

Tim Hortons, which completed its $12.5-billion merger with Burger King just six weeks ago, confirmed layoffs late Monday from its headquarters and regional offices.

But it refused to give a number on jobs cut, despite repeated requests from CBC News.

"Respectfully, because we are still in the process of the re-organization – we're not in the position to confirm the number of people impacted either leaving the company or with new opportunities," Tim Hortons vice-president of corporate affairs Alexandra Cygnal said in an email.

The Tim Hortons/Burger King merger is backed by Burger King owner 3G Capital, a Brazilian investment firm known for its ruthless cost-cutting.

As part of its deal with the federal government, the company, renamed Restaurant Brands International, agreed not to cut front-line staff working at Tim Hortons restaurants.

But that agreement did not apply to the more than 2,000 employees working at headquarters, distribution centres or regional offices in Guelph, Ont., Kingston, Ont., British Columbia, Alberta, Quebec, and Nova Scotia.

Internal memo to employees

Three days before the layoffs, Tim Hortons sent an internal letter to employees apologizing for the "stress" that media reports of upcoming cuts might have created.

CBC News has obtained a copy of a memo sent last Friday claiming reports in the Financial Post of impending layoffs of "significant" numbers of people were "simply incorrect."

"We apologize to all of you for the manner in which this media news was shared. We have nothing to announce at this time," read the memo, signed by Elias Diaz Sese, a former Burger King executive named president of Tim Hortons in December.

Sese acknowledged the chain would be changing its structure, saying the changes would make for quicker decision-making and "enable the firm to capture opportunities in a fast-moving global marketplace."

"Our top priority throughout this process has been one thing – respect," the memo said. "While we understand that today's news reports have created undue stress for many of you, we will strive to be respectful to you all."

Industry analysts Barry Schwartz said Tim Hortons may be reluctant to announce the number of job cuts because there are more layoffs to come.

3G's style has been to run with very little overhead and to make money from royalties paid by franchisees, Schwartz, investment officer at Baskin Wealth Management, told CBC News.

"No one should be surprised. All one had to do was look at what happened with Burger King when 3G came in and how many people they let go," Schwartz said.

"This is going to be a lean-type operation with very little cost and very little perqs to the management. Management will get rewarded if the shares go higher," he added, saying that management will be concentrating on stock performance.